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Control Systems And Solving Tensions

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Discuss about the Management Control Systems and Solving Tensions.


Management Control Systems and Solving Tensions

  1. Financial Control System
  2. One of the tensions that is evident in the case of Larkin firm touches on the assignment of costs; thus, a financial management control system must be put in place for purposes of ensuring that the allocation of costs is efficient to the extent that it does not cause tensions within the firm. For instance, in the firm, tension is arising due to the fact that costs such as travelling and other expenses are not well assigned to associates who have to travel and work outside the firm. Coming up with a financial control system will help to regulate the manner which the employees of the organization are spending their money while carrying out the functions of the company, and how the company will reimburse them (Lam, 2014).         

A good example of a management financial control system that can be put in place is to provide guidelines to the staff of the law firm, explaining to them on the most acceptable costs that they should incur while serving the interests of the law firm, and how they would be refunded back their money. Moreover, any money they incur while serving the needs of the customer should be charged back to the customer, and the employee refunded back the costs incurred after finishing the task at hand (Wheelen & Hunger, 2017). While coming up with this control system, the law firm should insist on the production of invoices and receipts, before compensation. Moreover, to reduce the risks that the law firm would be facing, it is customers who should fund for any additional costs incurred while serving their interests.        

  1. Financial control system is also applicable in the management of the loss of profits that the law firm is experiencing. Before coming up with a financial control; system that can help to address this loss of profit, there is a need of understanding why the profits are low. One of the reasons is because of high operational costs and expenses. To mitigate on these expenses, the management should establish a department that will be responsible for developing a monthly and annually projected cash flow, and identification of the various factors that may limit the capability of the law firm to maximize its profits (Brigham, 2014). Moreover, there will be a need of reducing benefits, and this includes the identification of benefits paid to employees, that they do not need (Certo, 2015). The law firm should ensure that it only pays much needed benefits to its employees, as a way of cost reduction.      
  2. Regarding the bonuses the company pays, it should restructure its bonus system, so that it pays based on the essential services that employee provide. This will increase the amount of bonuses paid to their staff, and at the same time, eliminating payment of unnecessary bonuses to the employees of the organization.
  3. Quality Controls
  4. There will be a need of developing a quality control system at the bankruptcy department of the law firm. Note that, the bankruptcy department is still new and unprofitable, because of lack of customers. The quality control system should not put pressure on the bankruptcy department to be productive at the same level with other departments of the law firm. On this note, the quality control measures should aim at ensuring that the services provided by the department are of high quality and the customers who are served are retained (Posner, 2014). They can only be retained if they are satisfied with the services that are provided by the bankruptcy department.    

To be effective ion these quality control measures, there will be a need of task delegation. The management of the firm will have to identify the most experienced member of the bankruptcy department, and assign him leadership tasks, that will help in motivating the employees of the department to work hard (Heizer, 2016). Other measures would include developing a culture of collaboration and cooperation within the department. It is an obvious fact that without team work, the department cannot achieve its goals. Fostering teamwork within the bankruptcy department is therefore an important quality control system that the law firm can seek to enact.

  1. When it comes to the promotion of a junior partner to a full partner, there is a need of insisting on the quality of work produced and the years of experience the junior partner has working with the law firm. For instance, a junior partner who manages to have more than 50% rate of repeat customers, with more than 3 years of experience should be considered for full partnership. This is because the quality of work they produce is of good.


Brigham, E. F. (2014). Financial management theory and practice. Atlantic Publishers & Distri.   

Certo, S. (2015). Supervision: Concepts and skill-building. McGraw-Hill Higher Education.

Heizer, J. (2016). Operations Management, 11/e. Pearson Education India. 

Lam, J. (2014). Enterprise risk management: from incentives to controls. John Wiley & Sons.

Posner, R. A. (2014). Economic analysis of law. Wolters Kluwer Law & Business.

Wheelen, T. L., & Hunger, J. D. (2017). Strategic management and business policy. pearson.

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